High Horsepower

Off-road, marine, and railroad are three demanding high horsepower (HHP) segments leveraging the benefits of natural gas to significantly reduce fuel costs—up to 50 percent—and to minimize their environmental impact in order to comply with government mandated air quality regulations. Because of these benefits, emerging natural gas HHP applications in these segments are generating a multitude of well-funded pilot demonstration projects and a growing number of commercial deployments.

The U.S. transportation sector is responsible for 2/3 of all petroleum use. While on-road vehicles represent approximately 80 percent of this consumption, HHP applications consume more than 30 billion gallons of diesel fuel per year as noted in the chart. Liquefied Natural Gas (LNG) is primarily used in these applications to displace diesel due to its energy density and easy of storage, which is necessary for high-fuel use transportation applications.

Off-Road
Today, most off-road NGV activity is occurring in mining applications. The largest mine trucks can typically burn between 150,000 and 400,000 gallons of fuel annually. There are more than 28,000 large mine trucks (>100 ton capacity) worldwide, and up to 40 of these trucks can operate at a single mine. Oil and gas production also falls into the off-road HHP category, but typical applications in this segment apply to non-mobile applications, such as dual fuel (50 percent natural gas, 50 percent diesel) stationary gensets, drill rigs, workover rigs, and fracturing engines.

Recent North American activity:

There are currently 23 LNG-powered coal-haul trucks operating at the Powder River Basin mine in Wyoming.

Shell/Caterpillar signed an agreement to test new LNG dual-fuel engines for oil sand mining trucks in Alberta, Canada, in 2016.

MarineAn accelerated adoption of LNG-fueled cargo vessels, tugboats, ferries, and cruise ships is expected before the North American Emissions Control Area regulations, which require ships operating within 200 miles of the U.S. coast to reduce sulfur emissions, take effect January 2015. Additional air quality regulations will take effect that are designed to reduce nitrogen oxide (NOx) emissions in 2016. This is an additional environmental driver that will support market growth as marine transportation transitions from dirty diesel and marine oil. With natural gas being inherently clean as well as costing up to 50 percent less than marine fuels, the transition to LNG is an attractive choice. For example, an inland waterway tow boat pushing a fully loaded barge consumes 7,000 gallons of fuel in a single day. Since vessels remain in service for decades, operators have more time to recover the higher incremental cost of LNG engines and refrigerated storage to make the economic case to embrace natural gas as a maritime fuel.

Here are some North American developments:

Crowley Maritime has placed an order for two LNG ConRo ships for U.S.–Puerto Rico trade.

U.S. Navy is funding a study on the feasibility of converting a subset of the USACE fleet to LNG or CNG.

U.S. DOT Maritime Administration (MARAD) is funding two studies on increased use of LNG in the maritime industry.

Harvey Gulf operates five LNG-fuelled OSV and has ordered a sixth. It has committed $400 million for this project, which includes two LNG refueling docks.

Washington State is evaluating LNG ferries.

Staten Island is converting a Ferry

RailroadThere are 561 freight railroads operating in the U.S. today. The top 7 Class 1 railroads (line-haul freight) consume over 3.6 billion gallons of diesel fuel per year, which translates to 10 million gallons per day, representing 7 percent of all diesel consumed in the U.S. It is estimated that an LNG locomotive costs $1 million more than its diesel counterpart. Because trains are kept in service for relatively long periods of time and consume huge amounts of fuel, the economics for LNG can be a good solution for this industry.

The price spread between the fuels allows for a relatively quick payback of the incremental cost to implement LNG locomotives, and it translates to tremendous long-term savings. These savings can seriously impact the bottom line of rail operators because the industry’s fuel costs represent an average of 23 percent of its total operating expenses.

Below are some examples of North American LNG/CNG locomotive activity:
• Canadian National Railway is testing LNG-fueled locomotives in revenue service in northern Alberta.
• LA MetroLink is studying this option.
• Indiana Harbor (Chicago switch carrier) is converting 31 locomotives to CNG.
• CSX and GE will pilot test LNG technology for locomotives.